Adam Galinsky and Daniel Diermeier find that consumers react as poorly to "no comment" as they do to a confrontational response

By Tim De Chant

Daniel Diermeier

"We are unable to comment on this tragic accident until all the facts are known," Toyota said in a statement issued in response to the August 2009 accident that killed California Highway Patrol officer Mark Saylor.

The crash launched a series of investigations and product recalls that would eventually undermine the storied Japanese automaker's reputation for safety and quality.

"No comment" is a typical response for a company in Toyota's position. But while executives see "no comment" as a safe and middle-of-the-road statement, the public hears a company trying to deny guilt and shirk responsibility.

In fact, there may be little discernable difference in public reaction between "no comment" and a defensive approach to a crisis, according to new research by Adam Galinsky, the Morris and Alice Kaplan Professor of Ethics and Decision in Management, and Daniel Diermeier, the IBM Professor of Regulation and Competitive Practice.

The professors found that companies are perceived positively when they respond to crises in engaged and empathetic ways. Companies that offer "no comment" or react defensively not only may be harming their brand, they could be driving consumers away from their products in ways they never imagined.

Galinsky and Diermeier, along with Eric Luis Uhlmann, a postdoctoral researcher at Kellogg, George E. Newman, a postdoctoral researcher at Yale, and Victoria L. Brescoll, an assistant professor at Yale, set up a series of five experiments based around two fictitious crises. The first three examined the range of company responses to a crisis: engaged, defensive, or "no comment." The last two evaluated what the authors call "spillover" effects — how a crisis shaped opinions of the company's logo and affected the consumption and perceived taste of a product.

Participants in all studies reacted more positively when the company involved in the crisis gave an engaged response. For example, when a bottled-water company involved in a sexual harassment case stated firmly that inappropriate behavior was not tolerated and that allegations would be taken seriously, participants thought better of the company, drank more of its water, and said it tasted better than when the company gave a defensive or "no comment" response. In another case involving harmful food additives, the results were strikingly similar. When the company gave a defensive or "no comment" response to a crisis, participants found the product logo less attractive.

Many of Galinsky and Diermeier's findings fly in the face of traditional corporate wisdom concerning crisis response. Many companies begin by trying to marginalize the problem. Toyota strove to keep itself out of the headlines with its "no comment" response to Saylor's accident. Legal departments will often advise executives to stick with "no comment" to limit their company's liability. But by giving such a statement, executives may lose far more in brand value than they could gain in minimizing legal risks, Diermeier says.

"There is a clear sense that a crisis strategy that's engaged and reaching out works better than one that is self-justifying," Diermeier says. "And most important is (the finding) that saying nothing (and) being quiet in these cases has basically the same effect as if you are confrontational.

"From a manager's point of view, you have to balance customer risk and legal risk," Diermeier adds. "You have to make sure that you really connect with the affective or emotional dimension here. In your crisis response, connect with people not just at a factual but at an emotional level. People don't just need to be convinced — they need to be reassured."